Company law revision question and answer

Tirop who owns 500 shares in Mbao Co. Limited, a public company limited shares contracted to sell them to Sironik. Neither of them has transferred shares before:
i) Advise them on the procedure of transfer of shares.
ii) What would the legal position be if Tirop transferred the shares to Joash before the transfer to Sironik was registered?
ANSWER
 Both Tirop and Sironik must execute the proper instrument of transfer
 Sironik must thereafter present the executed instrument of transfer for stamping i.e., payment of duty
 Sironik must present the stamped instrument of transfer and Tirop‟s share certificate to the company for registration of the transfer
 On registration of the transfer, i.e., entry of Sirnoik‟s name in the register, the share
certificate is cancelled and another issued in favour of Sironik.
 Tirop‟s conduct would be fraudulent in character. however, Joash would not
acquire title in the shares

Both Sironik and Joash have an equitable interest in the shares Tirop retains the legal interest.

The equities are said to be equal and the first in time prevails.
 However, the first transferee to secure a valid registration acquires title.

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